S&P rates Rite Aid convertibles CCC+

Standard & Poor's said it assigned its CCC+ issue rating and 6 recovery rating to Rite Aid Corp.'s (B/negative) $150 million senior unsecured convertible notes due 2015.

The rating is two notches below the corporate credit rating on Rite Aid because the recovery rating is 6, indicating its expectation for negligible recovery in the event of a payment default, S&P said, adding that proceeds from these notes will be used to redeem all of its $150 million 6.125% senior notes due 2008.

At the same time, the agency said it affirmed the B corporate credit rating on the company.

The outlook remains negative.

S&P noted that the ratings reflect the challenges Rite Aid faces in both integrating 1,800 acquired stores and improving overall operations amid intense industry competition while they also reflect the company's significant debt burden and thin cash flow protection.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.